UNITED STATES - Orange County Employees Retirement System has approved a plan to explore the idea of creating a separate allocation for opportunistic or innovative investments.

The proposal is to invest up to 3% of the pension fund's total plan assets - around $257m (€182m) in a strategy which straddles several asset classes but would include real estate alongside domestic and international equities, fixed income and absolute returns.

Orange County officials decided at its 27 August board meeting there could be some strong niche investment opportunities which it will need to act quickly on, so the board hopes to have the capital as soon as possible.

With a limited amount of debt in the marketplace now, many corporate transactions will need to be funded with equity but Orange County has specified should it go ahead any transactions will need to be approved by the board prior to a closing.

Its strategy going forward is to sell off its separate account assets and moving the proceeds into commingled funds.

Orange County had total plan assets of $7.7bn to the end of June, of which 8.45% was invested 8.45% in real estate against a targeted asset allocation of 10%.

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